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The World Bank International Advisory Group for Government Payments Technical Meeting – Rome, Italy June 20-21, 2011 S PowerPoint Presentation
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The World Bank International Advisory Group for Government Payments Technical Meeting – Rome, Italy June 20-21, 2011 SADAD Payment System By Abdulmalik Alsheikh . Bill payment in Saudi Arabia has evolve during the last three decades and passed through four stages….

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Presentation Transcript
slide1

The World Bank International Advisory Group for Government Payments

Technical Meeting – Rome, Italy June 20-21, 2011

SADAD Payment System

By Abdulmalik Alsheikh

slide2
Bill payment in Saudi Arabia has evolve during the last three decades and passed through four stages…

Bill Payment Timeline in Saudi Arabia

Beginning

1980’s

Problem

1990’s

Solution

2000’s

Reform

Today

slide3
The first stage started in the beginning of the 1980’s when SAMA mandated that all banks should accept bill payment at their branches…

Beginning

1980’s

Problem

1990’s

Solution

2000’s

Reform

Today

slide4
The first stage started in the beginning of the 1980’s when SAMA mandated that al banks should accept bill payment at their branches…

1980’s

Electricity

Telephone

Water

  • SAMA mandated banks to accept bill payments at branches
  • Utilities' Revenue Was Government Revenue
  • Customers only have bank branches and utility offices to pay
  • Limited Number Of Bills
  • Manual Collection Process

Bank Branches

Utilities Offices

slide5

The second stage started when the number of bills paid in Saudi Arabia increased rapidly which caused consumers complaints due to inefficient and time consuming payment process

Beginning

1980’s

Problem

1990’s

Solution

2000’s

Reform

Today

slide6

The number of bills has increased with the introduction of mobile telecom services and liberation of the telecom market which led to consumer complaints regarding bill payment...

1990’s

Top Consumer Issues Concerning Bill Payment

  • The number of utility bills has grown from 70M in 2000 to 250M in 2007
  • Telecom moved from quarterly billing to monthly or bimonthly
  • Number of services require regular payments grew from 5 billers to 100+
  • Government services grew to about 60 million annual transactions

Time consuming

100

Delays/Loss in postage

72

Disconnection of service due to delays in bill processing

67

63

Overlooking payment dates

Inconvenient

63

Handling large cash amounts

55

Having to keep track of multiple bills

52

0

20

40

60

80

100

Number of mentions, “Time Consuming” =100

slide7

In the third stage SAMA introduced SADAD to allow consumers to pay using all the banking channels regardless of the bank and opened the network to every biller…

Beginning

1980’s

Problem

1990’s

Solution

2000’s

Reform

Today

slide8

With time banks started to link electronically with utility providers to open new electronic channels to consumers but that only improved little the consumer experience in bill payment..

2000’s

Pre SADAD Bill Payment Network

  • Manual Collection Process Slowly Shifted To Electronic Process
  • This direct links models prevented many billers from entering this payment network
  • Banks resisted any new billers since there is financial no incentive to do so
  • This model could is not sustainable due to increasing growth in bill payment transactions, high entry barriers and indirect subsidies by banks to billers

Consumer

Electricity

Bank A

Telecom

Bank B

Water

Bank C

Government

Bank D

slide9

It was clear that there was a need for a centralized system that acts as an interface between billers and banks, so billers can use the banking channels with low cost…

2000’s

Pre SADAD Bill Payment Network

SADAD EBPP Model

Consumer

Consumer

Electricity

Bank A

Biller A

Bank A

SADAD

Telecom

Bank B

Biller B

Bank B

Water

Bank C

Bank N

Government

Bank D

Biller N

slide10

It was clear that there was a need for a centralized system that acts as an interface between billers and banks, so billers can use the banking channels with low cost…

2000’s

SADAD EBPP Model

  • Centralized and shared infrastructure
  • Provides all Billers with access to Banks channels without discrimination
  • increase transparency of government collection process
  • significantly reducing the time spent by consumers paying bills
  • Improve availability of collected Money from 14-60 days to only 1 business day

Consumer

Biller A

Bank A

SADAD

Biller B

Bank B

Bank N

Biller N

slide11

Today, SADAD has reformed the payment market by introducing a full array of payment products that is accessible to every consumer in Saudi Arabia

Beginning

1980’s

Problem

1990’s

Solution

2000’s

Reform

Today

slide12
Today there are four major products offered through all the banking channels (ATM, Phone Banking, Internet Banking and Branches)

SADAD Products And Delivery Channels

Bill Payment

Prepaid Services

MOI Services

Refund

Automated Teller Machines

Online Banking

Phone Banking

Banks Branches

Consumers

sadad expanded its network through on boarding a total of 104 billers as of q1 2011
SADAD expanded its network through on-boarding a total of 104 billers as of Q1 2011

SADAD Network Growth – Billers

slide14

Different billers in various industries have been linked indicating SADAD’s ability to serve all sectors that require electronic payment services

Government Billers 51%

Non -Government Billers 49%

ISPs

Customs

Initiatives & Projects

Ministries

Telecoms

Utility Services

Stock market information

Traffic Violation

Insurances

Passport Department

Department of Zakat

Personal Loans

Credit Cards

Chambers of Commerce

Press

Labor Importation

Driving License

Government funds

Airlines

Media

Installments

Post Services

Municipalities

Universities

slide15
The number of bills paid via SADAD grew exponentially to reach a record 28.5 million bills paid in Q1-2011.

SADAD Quarterly Payments Transactions - Volume (in ,000 payments)

the total value for the quarterly transactions hit sar 21 65 billion in q1 2011
The total value for the quarterly transactions hit SAR 21.65 billion in Q1-2011.

SADAD Quarterly Payments Transactions – Value (in 000,000 SAR)

sadad shifted consumer behavior from physical channels branches to electronic channels
SADAD shifted consumer behavior from physical channels (branches) to electronic channels

SADAD Market Share Trends

SADAD Channels Usage Trends

awards and certificates
Awards and certificates

UN Public Service Award

GCC e-Government Award

Injaz e-Government Achievement Award

ISO Quality Mgmt

ISO Information Security Mgmt